Updated on 06/30/2011 12:15PM

NYRA discloses salary information


The New York Racing Association has responded to a demand by a state regulatory body to disclose the salaries of its senior officials and has pledged to work with the board on a long-term financial plan, NYRA's chief executive, Charles Hayward, said on Monday.

Hayward acknowledged the disclosure during a press event to preview the association's upcoming meet at Saratoga Racecourse. Just after pausing in his presentation to take a drink of water and to clear his throat, Hayward apologized to the chairman of the Franchise Oversight Board, Robert Megna, and said that he regretted not being able to appear at the oversight board's meeting last Monday, when NYRA officials were questioned about failing to include the salaries in financial statements issued to the board.

Hayward said that he had a pre-existing commitment to all-day meetings with out-of-state officials regarding NYRA business strategies that precluded him from attending the meeting, but said he understood board officials characterizing his failure to appear as a "slapping in the face."

"Believe me, I had no intention of doing that," Hayward said.

Hayward said that NYRA would not release the salaries publicly, though he said that the Franchise Oversight Board was free to distribute the material that NYRA provided. Officials representing the oversight board did not respond on Monday to inquiries.

Last year, the oversight board had also requested salary information from NYRA, and the association balked. Under public pressure, however, NYRA relented, releasing the salaries in a packet of material that compared the salaries with the higher compensation of other racing executives in similar positions. The NYRA salaries were then attacked by state political figures and newspaper editorial boards.

In the disclosure last year, NYRA said that Hayward received compensation of $460,000. The second-highest paid individual, chief operating officer Hal Handel, received compensation of $440,000.

Since the dispute last year over the salaries, NYRA told the board that it granted 5.5 percent raises to its top executives at the start of this year, along with 3 percent raises for the rest of the association's administrative staff. The raises set off another round of criticism of NYRA, which has struggled financially since emerging from bankruptcy in 2008.

Hayward said that NYRA had believed that the previous disclosures about the salaries and raises would have been sufficient for the board this year.

"I made a mistake," Hayward said. "That wasn't sufficient."

At the meeting last Monday, officials of the oversight board also raised questions about NYRA's long-term viability, citing the association's $17.1 million loss in 2010 and a budget that forecast a slight reduction in betting revenue and a 7.9 percent increase in expenses.

Despite those losses, Hayward said that NYRA officials are optimistic that the association will begin turning a profit within the next two years, largely because of an influx of money from subsidies received through a casino that is set to open at Aqueduct in September or October. Under state law, NYRA will receive 4 percent of the casino's revenue for capital expenditures and an additional 3 percent for operating expenses, for a total of perhaps $30 million in additional revenue. Horsemen and breeders will receive approximately 7.5 percent of the revenues.

Hayward also said that the $17.1 million loss in 2010 was exacerbated by the association's need to classify $19.5 million in outstanding payments as "bad debt" following the December closure of New York City Off-Track Betting Corporation. Approximately half of that debt would have flowed to NYRA, and the other half to the association's horsemen in purse payments.

The 2010 results, however, were also bolstered by the injection of approximately $17 million through a loan provided by the operator of the Aqueduct casino, Genting New York. That loan will be paid back from the association's future share of the casino subsidies, and Hayward said that the impact of the payback schedule on NYRA's financial condition would be minimal.